Saturday, May 5, 2012

The Most Powerful Company You've Never Heard of



According to the HUffPo report:

Meet CME Group. Last fall, Forbes revealed "The Four Companies That Control the 147 Companies That Own Everything," in which contributor Brendan Coffey argues that "the real power to control the world" lies not with the likes of Wal-Mart and Bank of America, but with the select few companies that control the indexes that rank these corporations. CME Group, owner of the Dow Jones Indexes, is one of these four companies, which is why it is important for all of us to get to know this company, how it makes its billions, and how it impacts us all.

The "CME" in "CME Group" stands for the Chicago Mercantile Exchange, which has special significance for those of us who live in Chicago. We're familiar with "The Merc" and the Chicago Board of Trade, the two iconic commodities futures exchanges comprising Chicago's Wall Street. (And if you're not from Chicago, you've likely seen the trading floor of Board of Trade -- featured in the classic Ferris Bueller's Day Off). CME Group formed relatively recently, when the Mercantile Exchange bought the Board of Trade in 2007. But a five-year growth and acquisition spree has secured its status as one of the four masters of the corporate universe.

So what does CME Group do, exactly? Maybe the word "derivative" rings a bell. Derivatives are the risky financial products (think credit default swaps) that brought the economy crashing down. The exchanges Mostly, these exchanges operate as giant casinos where thousands of ultra-wealthy traders and speculators go to place bets on the rise and fall of the price of commodities, including oil, gold, currencies, interest rates, and other exotic financial products.  Like more traditional casinos, CME Group makes its money by taking a cut of each and every bet. …

Find out more at http://www.huffingtonpost.com/elizabeth-parisian/cme-group_b_1472694.html?ref=chicago

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